TPI Composites, Inc. – Value Analysis (NASDAQ:TPIC) : November 13, 2017

Capitalcube gives TPI Composites, Inc. a score of 82.

Our analysis is based on comparing TPI Composites, Inc. with the following peers – Sauer Energy, Inc., Powell Industries, Inc., Northern Power Systems Corp. and Shanghai Electric Group Co., Ltd. Unsponsored ADR (SENY-US, POWL-US, NPS-CA and SIELY-US).

Investment Outlook

TPI Composites, Inc. has a fundamental score of 82 and has a relative valuation of OVERVALUED.

Fundamental Score

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Company Overview

  • With respect to peers, relative outperformance over the last year is in contrast to the more recent underperformance.
  • It currently trades at a Price/Book ratio of (4.39).
  • TPIC-US‘s operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.
  • TPIC-US has a successful operating model with relatively high net profit margins and asset turns.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • Over the last five years, TPIC-US‘s return on assets has improved from median to better than the median among its peers, suggesting the company has found relative operating advantages.
  • The company’s relatively high pre-tax margin suggests tight control on operating costs versus peers.
  • While TPIC-US‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
  • TPIC-US has additional debt capacity.

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Leverage & Liquidity

TPIC-US has additional debt capacity.

  • With debt at a reasonable 22.68% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 0.76%), and a well-cushioned interest coverage level of 4.70x, TPIC-US has the capacity to borrow some more.
  • All 4 peers for the company have an outstanding debt balance.

TPIC-US has moved to a relatively high liquidity from a median liquidity and leverage profile at the recent year-end.

  • TPIC-US‘s interest coverage is its highest relative to the last five years and compares to a low of 0.20x in 2013.
  • While its interest coverage increased to 4.70x from 2.45x (in 2016), its peer median decreased during this period to -3.29x from 2.45x.
  • Interest coverage rose 7.99 points relative to peers. It is also above the 2.50x coverage benchmark unlike the peer median.
  • TPIC-US‘s debt-EV is similar to last year’s high of 22.68%, which compares to a low of 22.68% in 2016.
  • Compared to 2016, debt-EV has remained relatively stable for both the company (22.68%) and the peer median (0.76%).

Access the detailed analysis for TPI Composites, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Sauer Energy, Inc. 2.65 0.33 -3.29 -1316.14
Powell Industries, Inc. 0.76 2.86 -27.6 862.4
Northern Power Systems Corp. -1044.34 0.85 -61.02 -139.85
Shanghai Electric Group Co., Ltd. Unsponsored ADR -207.79 1.3 5.78 35.11
TPI Composites, Inc. 22.68 1.32 4.7 46.92
Peer Median 0.76 1.3 -3.29 35.11
Best In Class -1044.34 2.86 5.78 862.4

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Company Profile

TPI Composites, Inc. is manufacturer of composite wind blades. It enables wind turbine OEMs, who have relied on in-house production, to outsource the manufacturing of some of their wind blades through its manufacturing facilities .The company was founded in 1968 and is headquartered in Scottsdale, AZ.


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